Financial Accounting
15th Edition
ISBN: 9781337272124
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Textbook Question
Chapter 9, Problem 7CP
Apple Inc. designs, manufactures, and markets personal computers and related personal computing and communicating solutions for sale primarily to education, creative, consumer, and business customers. Substantially all of the company’s sales over the last five years are from sales of its Macs, iPods, iPads, and related software and peripherals. For two recent fiscal years, Apple reported the following (in millions):
Assume that the
- 1. Compute the accounts receivable turnover for Year 2 and Year 1. Round to two decimal places.
- 2. Compute the days’ sales in receivables at the end of Year 2 and Year 1. Use 365 days and round to one decimal place.
- 3.
What conclusions can be drawn from (1) and (2) regarding Apple’s efficiency in collecting receivables?
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Sprint Corporation (S) is one of the largest digital wireless service providers in the United States.In a recent year, it had approximately 60 million direct subscribers (accounts) that generated revenueof $33,347 million. Costs and expenses for the year were as follows (in millions):Cost of revenue $14,958Selling, general, and administrative expenses 7,994Depreciation and amortization 8,150
Assume that 30% of the cost of revenue and 70% of the selling, general, and administrative expensesare fixed to the number of direct subscribers (accounts).a. What is Sprint’s break-even number of accounts, using the data and assumptions given? Roundto one decimal place.b. How much revenue per account would be sufficient for Sprint to break even if the number ofaccounts remained constant? Round to one decimal place.
Kyzera manufactures, markets, and sells cellular telephones. The average total assets for Kyzera is $250,000. In its most recent year, Kyzera reported net income of $65,000 on revenues of $475,000. What are total expenses for Kyzera in its most recent year?
Knight Roundtable Co. had annual credit sales of $1,080,000 and an average collection period of 32 days in 2018. Assume a 360-day year. What were the company’s average accounts receivable balance? Accounts receivable are equal to the average daily credit sales times the average collection period.
Fisk Corporation is trying to improve its inventory control system and has installed an online computer at its retail stores. Fisk anticipates sales of 49,000 units per year, an ordering cost of $8 per order, and carrying costs of $1.60 per unit.
Chapter 9 Solutions
Financial Accounting
Ch. 9 - What are the three classifications of receivables?Ch. 9 - Dans Hardware is a small hardware store in the...Ch. 9 - What kind of an account (asset, liability, etc.)...Ch. 9 - After the accounts are adjusted and closed at the...Ch. 9 - A firm has consistently adjusted its allowance...Ch. 9 - Which of the two methods of estimating...Ch. 9 - Neptune Company issued a note receivable to...Ch. 9 - If a note provides for payment of principal of...Ch. 9 - The maker of a 240,000, 6%, 90-day note receivable...Ch. 9 - The note receivable dishonored in Discussion...
Ch. 9 - Journalize the following transactions, using the...Ch. 9 - Journalize the following transactions, using the...Ch. 9 - Journalize the following transactions, using the...Ch. 9 - Journalize the following transactions, using the...Ch. 9 - At the end of the current year, Accounts...Ch. 9 - At the end of the current year, Accounts...Ch. 9 - At the end of the current year, Accounts...Ch. 9 - At the end of the current year, Accounts...Ch. 9 - Lundquist Company received a 60-day, 9% note for...Ch. 9 - Prefix Supply Company received a 120-day, 8% note...Ch. 9 - Financial statement data for years ending December...Ch. 9 - Financial statement data for years ending December...Ch. 9 - Prob. 1ECh. 9 - MGM Resorts International owns and operates hotels...Ch. 9 - Journalize the following transactions in the...Ch. 9 - Journalize the following transactions in the...Ch. 9 - Quantum Solutions Company, a computer consulting...Ch. 9 - At the end of the current year, the accounts...Ch. 9 - Toot Auto Supply distributes new and used...Ch. 9 - The accounts receivable clerk for Kirchhoff...Ch. 9 - Kirchhoff Industries has a past history of...Ch. 9 - Using data in Exercise 9-9, assume that the...Ch. 9 - Performance Bike Co. is a wholesaler of motorcycle...Ch. 9 - Using the data in Exercise 9-11, assume that the...Ch. 9 - The following selected transactions were taken...Ch. 9 - The following selected transactions were taken...Ch. 9 - Prob. 15ECh. 9 - Using the data in Exercise 9-15, assume that...Ch. 9 - Casebolt Company wrote off the following accounts...Ch. 9 - Seaforth International wrote off the following...Ch. 9 - Determine the due date and the amount of interest...Ch. 9 - Spring Designs Decorators issued a 120-day, 4%...Ch. 9 - The series of five transactions recorded in the...Ch. 9 - The following selected transactions were completed...Ch. 9 - Journalize the following transactions of Trapper...Ch. 9 - Journalize the following transactions in the...Ch. 9 - List any errors you can find in the following...Ch. 9 - Ralph Lauren Corporation designs, markets, and...Ch. 9 - The Campbell Soup Company manufactures and markets...Ch. 9 - Prob. 28ECh. 9 - Prob. 29ECh. 9 - The following transactions were completed by Daws...Ch. 9 - Trophy Fish Company supplies flies and fishing...Ch. 9 - Call Systems Company, a telephone service and...Ch. 9 - Flush Mate Co. wholesales bathroom fixtures....Ch. 9 - The following data relate to notes receivable and...Ch. 9 - Prob. 6PACh. 9 - The following transactions were completed by The...Ch. 9 - Wig Creations Company supplies wigs and hair care...Ch. 9 - Prob. 3PBCh. 9 - Gen-X Ads Co. produces advertising videos. During...Ch. 9 - The following data relate to notes receivable and...Ch. 9 - Prob. 6PBCh. 9 - Bud Lighting Co. is a retailer of commercial and...Ch. 9 - Prob. 2CPCh. 9 - Prob. 4CPCh. 9 - For several years, Xtreme Co.s sales have been on...Ch. 9 - Best Buy is a specialty retailer of consumer...Ch. 9 - Apple Inc. designs, manufactures, and markets...Ch. 9 - Prob. 8CP
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Ralph Lauren Corporation designs, markets, and distributes a variety of apparel, home decor, accessory, and fragrance products. The companys products include such brands as Polo by Ralph Lauren, Ralph Lauren Purple Label, Ralph Lauren, Polo Jeans Co., and Chaps. Polo Ralph Lauren reported the following (in thousands) for two recent years: Assume that accounts receivable (in millions) were 607,000 at the beginning of Year 1. a. Compute the accounts receivable turnover for Year 2 and Year 1. Round to two decimal places. b. Compute the days sales in receivables for Year 2 and Year 1. Use 365 days and round to one decimal place. c. What conclusions can be drawn from these analyses regarding Ralph Laurens efficiency in collecting receivables?arrow_forwardPolo Ralph Lauren Corporation designs, markets, and distributes a variety of apparel, home decor, accessory, and fragrance products. The companys products include such brands as Polo by Ralph Lauren, Ralph Lauren Purple Label, Ralph Lauren, Polo Jeans Co., and Chaps. Polo Ralph Lauren reported the following (in thousands) for two recent years: Assume that accounts receivable (in millions) were 486,200 at the beginning of Year 1. a. Compute the accounts receivable turnover for Year 2 and Year 1. Round to one decimal place. b. Compute the days sales in receivables for Year 2 and Year 1. Use 365 days and round to one decimal place. c. What conclusions can be drawn from these analyses regarding Ralph Laurens efficiency in collecting receivables?arrow_forwardCostco is the largest chain of membership warehouse clubs in the world, based on sales volume, and it is the fifth largest general retailer in the United States. Costco focuses on selling products at low prices, often at a very high volume. These goods are usually bulk-packaged and marketed primarily to large families and businesses. Costco became the first company to grow from zero to 3 billion in sales in less than six years. In a recent fiscal year, Costcos sales totaled 116 billion, a 2 percent increase from 2015, and its net income reached 2.35 billion, an 1 percent decrease from 2015. This information, and much more, can be derived from the financial statements that merchandising firms such as Costco prepare on a regular basis to provide shareholders and other interested parties information about the companys activities and financial performance. 1. What type of information would a classified income statement provide to shareholders and other interested parties? 2. What type of information would a classified balance sheet provide to shareholders and other interested parties? Why would this information be important for calculating the working capital and the current ratio, for example?arrow_forward
- Costco is the largest chain of membership warehouse clubs in the world based on sales volume, and it is the fifth largest general retailer in the United States. Costco focuses on selling products at low prices, often at a very high volume. These goods are usually bulk-packaged and marketed primarily to large families and businesses. Costco became the first company to grow from zero to 3 billion in sales in less than six years. In a recent fiscal year, Costcos sales totaled 76.3 billion, a 29.3 percent increase from 2006, and its net income reached 1.30 billion, an 18.1 percent increase from 2006. This information, and much more, can be derived from the financial statements that merchandising firms such as Costco prepare on a regular basis to provide shareholders and other interested parties information about the companys activities and financial performance. 1. What type of information would a classified income statement provide to shareholders and other interested parties? 2. What type of information would a classified balance sheet provide to shareholders and other interested parties? Why would this information be important for calculating the working capital and the current ratio, for example?arrow_forwardUpton Computers makes bulk purchases of small computers, stocks them in conveniently located warehouses, ships them to its chain of retail stores, and has a staff to advise customers and help them set up their new computers. Uptons balance sheet as of December 31, 2019, is shown here (millions of dollars): Sales for 2019 were 350 million, and net income for the year was 10.5 million, so the firms profit margin was 3.0%. Upton paid dividends of 4.2 million to common stockholders, so its payout ratio was 40%. Its tax rate was 25%, and it operated at full capacity. Assume that all assets/sales ratios, (spontaneous liabilities)/sales ratios, the profit margin, and the payout ratio remain constant in 2020. a. If sales are projected to increase by 70 million, or 20%, during 2020, use the AFN equation to determine Uptons projected external capital requirements. b. Using the AFN equation, determine Uptons self-supporting growth rate. That is, what is the maximum growth rate the firm can achieve without having to employ nonspontaneous external funds? c. Use the forecasted financial statement method to forecast Uptons balance sheet for December 31, 2020. Assume that all additional external capital is raised as a line of credit at the end of the year. (Because the debt is added at the end of the year, there will be no additional interest expense due to the new debt.) Assume Uptons profit margin and dividend payout ratio will be the same in 2020 as they were in 2019. What is the amount of the line of credit reported on the 2020 forecasted balance sheets? (Hint: You dont need to forecast the income statements because the line of credit is taken out on the last day of the year and you are given the projected sales, profit margin, and dividend payout ratio; these figures allow you to calculate the 2020 addition to retained earnings for the balance sheet without actually constructing a full income statement.)arrow_forwardJW Office Supplies, Inc., is a wholesale distributor of office supplies. It sells pencils and pens, paper goods (including computer paper and forms), staplers, calendars, and other items, excluding furniture and other major items such as copy machines that you would expect to find in an office. Sales have been growing at 5 percent per year during the past several years. Mr. Kay, the president of JW Office Supplies, recently attended a national office supplies convention. In conversations during that convention, he discovered that sales for ABC Office Supplies competitors have been growing at 15 percent per year. Arriving back home, he did a quick investigation and discovered the following: JW Office Supplies customer turnover is significantly higher than the industry average. JW Office Supplies vendor turnover is significantly lower than the industry average. The new market analysis system was supposed to be ready two years ago but has been delayed for more than one year in systems development. A staff position, reporting to the president, for a person to prepare and analyze cash budgets was created two years ago but has never been filled. Mr. Kay has called on you to conduct a systems survey of this situation. You are to assume that a request for systems development has been prepared and approved. The information system at JW Office Supplies is much like that depicted in Chapters 10 through 16. Make and describe all assumptions that you believe are necessary to solve any of the following: a. What are the specific tasks of this systems survey? b. Indicate specific quantifiable benefits and costs that should be examined in assessing the economic feasibility of any solutions that might be proposed. Explain how you would go about quantifying each benefit or cost. c. Propose and explain three different scopes for the systems analysis. Use a context diagram to describe each scope alternative. Hint: What subsystems might be involved in an analysis?arrow_forward
- Redline Publishers, Inc., produces various manuals ranging from computer software instructional booklets to manuals explaining the installation and use of large pieces of industrial equipment. At the end of 2011, the company's balances sheet reported total assets of $62 million and total liabilities of $40 million. The income statement for 2011 reported net income of $1.1 million, which represents an approximate 3% increase from the prior year. The company's effective income tax rate is 30%. Near the end of 2011, a variety of expenditures were made to overhaul the company's manufacturing equipment. None of these expenditures exceeded $750, the materiality threshold the company has set for the capitalization of any such expenditures. Even though the overhauls extended the service life of the equipment, the expenditures were expensed, not capitalized. John Henderson, the company's controller, is worried about the treatment of the overhaul expenditures. Even though no individual…arrow_forwardKyzera manufactures, markets, and sells cellular telephones. The average total assets for Kyzera is $250,000. In its most recent year, Kyzera reported net income of $65,000 on revenues of $475,000. What is Kyzera’s return on assets?arrow_forwardNextel Communications, Inc. is one of the largest digital wireless service providers in the United States. In a recent year, it had 8,666,500 accounts that generated revenues of $7,689,000,000. Costs and expenses were as follows: Cost of revenue$ 2,869,000,000 Selling, general and administrative expenses 3,020,000,000 Depreciation 1,746,000,000 Assume that 65% of the cost of revenue and 55% of the selling, general and administrative expenses are variable to the number of accounts.Required: a) What is Nextel’s break-even number of accounts using the data and assumptions above? Round any per-unit computations to the nearest dollar. b) How much revenue per account would be sufficient for Nextel to break even if the number of accounts remained constant?arrow_forward
- Computer Associates International, Inc., the world's leading business software company, delivers the end-to-end infrastructure to enable e-business through innovative technology, services, and education. Recently, Computer Associates had 19,000 employees worldwide and revenue of over $6 billion. The following information is from the company's annual report. The Company has experienced a pattern of business whereby revenue for its third and fourth fiscal quarters reflects an increase over first- and second-quarter revenue. The Company attributes this increase to clients' increased spending at the end of their calendar year budgetary periods and the culmination of its annual sales plan. Since the Company's costs do not increase proportionately with the third- and fourth-quarters' increase in revenue, the higher revenue in these quarters results in greater profit margins and income. Fourth-quarter profitability is traditionally affected by significant new hirings, training, and…arrow_forwardListed below are selected events transactions relating to Windsor, Inc. for the current year ending December 31.Windsor manufactures laptop computers for sale in its own stores and for sale by other retailers. 1. On December 1, Windsor accepted an order from a new customer, Bonita Computers. Bonita has a questionable credit history, so Windsor requires a $12,000 deposit from Bonita in order to begin production on its order. 2. During December, cash sales at Windsor’s retail locations totaled $4,922,000, which includes the 7% sales tax Windsormust remit to the state by the fifteenth day of the following month. 3. During the year, Windsor was sued by a competitor for a patent violation. The competitor is claiming that Windsor’s liability is $2,950,000. Windsor’s attorneys have advised it that it is probable that the court will find for the company’s competitor. The attorneys estimate that the liability under the suit could be as little as $118,000 or as much as $590,000.…arrow_forwardKyzera manufactures, markets, and sells cellular telephones. The average total assets for Kyzera is $250,000. In its most recent year, Kyzera reported net income of $65,000 on revenues of $475,000. Does return on assets seem satisfactory for Kyzera given that its competitors average a 12% return onassets?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Financial AccountingAccountingISBN:9781337272124Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning
Financial AccountingAccountingISBN:9781305088436Author:Carl Warren, Jim Reeve, Jonathan DuchacPublisher:Cengage Learning
College Accounting (Book Only): A Career ApproachAccountingISBN:9781305084087Author:Cathy J. ScottPublisher:Cengage Learning
College Accounting (Book Only): A Career ApproachAccountingISBN:9781337280570Author:Scott, Cathy J.Publisher:South-Western College Pub
Pkg Acc Infor Systems MS VISIO CDFinanceISBN:9781133935940Author:Ulric J. GelinasPublisher:CENGAGE L
Financial Accounting
Accounting
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
Financial Accounting
Accounting
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Cengage Learning
College Accounting (Book Only): A Career Approach
Accounting
ISBN:9781305084087
Author:Cathy J. Scott
Publisher:Cengage Learning
College Accounting (Book Only): A Career Approach
Accounting
ISBN:9781337280570
Author:Scott, Cathy J.
Publisher:South-Western College Pub
Pkg Acc Infor Systems MS VISIO CD
Finance
ISBN:9781133935940
Author:Ulric J. Gelinas
Publisher:CENGAGE L
Responsibility Accounting| Responsibility Centers and Segments| US CMA Part 1| US CMA course; Master Budget and Responsibility Accounting-Intro to Managerial Accounting- Su. 2013-Prof. Gershberg; Author: Mera Skill; Rutgers Accounting Web;https://www.youtube.com/watch?v=SYQ4u1BP24g;License: Standard YouTube License, CC-BY